California's Cap-and-Tax Grab

Democrats in Sacramento are taking a victory lap for balancing this year's budget without raising taxes (not counting the $6 billion retroactive hike voters approved at political gunpoint in November). The dirty little secret is they're instead tapping California's new cap-and-trade program.

California expects to generate $500 million this year from auctioning off permits to emit carbon, and between $2 billion and $14 billion annually by 2015. This rich new vein of revenues was supposed to flow to green programs (e.g.,...